Dollar Tree, Inc. (NASDAQ:DLTR) Q3 2022 Earnings Call Transcript

Joe Feldman: That’s great. Thank you. And if I could follow-up with maybe a bigger picture question. I think as Rick had said in his prepared remarks that you view the company as kind of two really strong growth companies under one roof and — which I guess is not too different from the past, but it does imply that there is two different go-to-market strategies, which we know and ways of doing business. So I’m wondering how do you guys leverage the scale of the overall company and the operations? And like has anything changed with that strategy to have these combined fulfillment centers and purchasing power being stronger? Maybe you can just give a little more color on that?

Rick Dreiling: Hey, Mike. I’ll lead with that if that’s okay. Hey, what I would say is the things that — how we go to market, how we face the customer between the two banners are totally different. One is basic consumable retailing, the Family Dollar side. One is consistent everyday low price, one price point. The leverage, the beauty of the combination is all of the backside things that the consumer doesn’t experience, the accounting, the HR, the legal. And that’s where all those synergies exist even on the supply chain. How we deliver to the stores? How we look at this So all of those synergies are still there. But what we’re doing a much different — what I would think not only different, but better job is with how we’re facing the consumer realizing that, one is more notional driven and then again, one is more concerned with everyday excitement value. Michael, I’ll turn it over to you on that.

Mike Witynski: No. I think you stated it right. Well, the customer-facing side is where we’re leveraging, but on the back side, we’ll be leveraging all the opportunities we can as one organization.

Joe Feldman: That’s great. Thankss. That’s helpful response. Thanks guys and good luck with this quarter.

Operator: Thank you. We will take the next question from line John Heinbockel from Guggenheim. The line is open now. Please go ahead.

John Heinbockel: Hey, guys. A couple of questions on Family Dollar merchandising. So one, given the size of the box, how do you think about product breadth versus depth, that fundamental tension? And do you need to accelerate cooler capacity as part of the process? And then lastly, I know you’re working on supply chain, right, to try to improve out of stocks. How quickly do you think that begins to impact the business, right? Is that kind of six months out, a year out, maybe not that long, I thought it would be great.

Mike Witynski: Yes. So I’ll start with the breadth and depth of Family Dollar. Again, Larry and his team is going category-by-category, and he’s already made changes in our new H2.5, but that will be a continuous improvement throughout this next year, as him and his team apply that discipline and strategy to each category, we will be bringing in more SKUs where it makes sense to help meet the needs of the customer and comparing it to the rest of the market. And where we’ve done that in the categories that he’s done so far, we’re seeing great results in it. And I think that’s why we’re excited about our 2.5. We’re also using our linear space more. We’re putting in more shelves inside the box and then we can go vertically higher in the gondolas, the roles of shelving that we have right now.